Mindtree to buy stake in Aztecsoft for Rs 80 per share
SOURCE: EconomicTimes
DATE: May 2nd, 2008
Mohit Soapbox:
It is interesting to see a number of these small acquisitions happening in the BPO space. Part of it is survival.
ARTICLE
Back-office firm Mindtree Ltd on Friday said it has signed a definitive agreement to acquire 32.57 percent stake in engineering software services and research and development firm Aztecsoft at Rs 80 a share.
“We expect merger of Aztecsoft to be completed by early part of 2009/2010,” Mindtree’s Chairman and Managing Director Ashok Soota told reporters on Friday.
The transaction would value Aztecsoft at $90 million, it said in a statement. The company will also announce an open offer to Aztec’s public shareholder to buy an additional 20 percent stake, as per the country’s takeover regulations.
The open offer is expected to be completed by August 2008, Soota said.
“When you consider the guidance given by Aztecsoft, it doesnt look to me anybody will be able to say it is overpriced. It is a fair price,” Soota said.
The acquisition of Aztecsoft will be funded through its internal cash reserves, he said, adding that the acquisition will be adding to its earnings per share.
Mindtree’s profit margins would not be affected by the acquisition, he said.
“It is going to be seen as something of a win-win for both sides,” Soota said.
Mindtree offers research and development services while Aztecsoft does product development and testing services.
Mindtree has 180 clients while Aztecsoft has about 70 clients.
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